half-year results 2014/15 1, 2015 half-year results 2014/15 analysts conference certain statements...

April 1, 2015

April 1, 2015

Half-Year Results 2014/15Analysts Conference

Certain statements in this presentation regarding the business of Barry Callebaut are of a forward-

looking nature and are therefore based on management’s current assumptions about future

developments. Such forward-looking statements are intended to be identified by words such as

“believe,” “estimate,” “intend,” “may,” “will,” “expect,” and “project” and similar expressions as

they relate to the company. Forward-looking statements involve certain risks and uncertainties

because they relate to future events.

Actual results may vary materially from those targeted, expected or projected due to several

factors. The factors that may affect Barry Callebaut’s future financial results are discussed in the

Letter to Investors . Such factors are, among others, general economic conditions, foreign

exchange fluctuations, competitive product and pricing pressures as well as changes in tax regimes

and regulatory developments. The reader is cautioned to not unduly rely on these forward-looking

statements that are accurate only as of today, April 1, 2015. Barry Callebaut does not undertake to

publish any update or revision of any forward-looking statements.

Cautionary note

April 1, 2015 Half-year Results - Analysts Conference

� Highlights HY 2014/15

� Financial Review

� Strategy & Outlook

� Q&A

Agenda


Half-year Results 2014/15

Solid growth with strong profit improvement


Sales Volume

growth

+2.0%(Q1: 0.2%; Q2: +3.9%)

EBIT

+8.7% in CHF

+13.0% in L.c.

Net profit for the

period

+10.7% in CHF

+16.3% in L.c.

Volume growth

driven by

Western Europe,

Americas,

outsourcing and

Gourmet

EBIT per Tonne

+6.6% in CHF

+10.8% in L.c.

Strong profit

improvement

due to focus on

margins and cost

discipline

HY Results 2014/15

Volume growth fueled by main Regions, outperforming the market


8'085

4'051

3'002

2’002

876’297

AmericasSales Volume

HY 2013/14

Europe Global CocoaAsia

893’437

Sales Volume

HY 2014/15

+2.1%+1.9%

+5.8%+1.2%

+2.0%(tonnes)

Growth

vs. prior

year

Market Volume

growth * -1.1% -2.0% -2.4% -1.5%

* Source: Nielsen Data – Chocolate confectionery, 25 countries , Sep – Feb 2015

HY 2014/15

…along our three key growth drivers

Volume growth +6.0 % vs prior year

%

of total Group

Volume

Gourmet & SpecialtiesEmerging Markets Long-term outsourcing &

Strategic partnerships

+1.7% vs prior year +5.0 % vs prior year

33%

31%

11%

CAGR 5 year

Volume+6.0 %+17.3% +21.0%


HY 2014/15

� Strong volume growth in South America

� Brazilian business double-digit growth

� Opening of Chocolate factory in Chile

� Difficult environment in EEMEA

� Weak demand in Russia

� Strong growth in Gourmet, new Academy

in Moscow and Dubai

� Slowdown in Asia Pacific markets

� New Chocolate factory India

� Strong growth in Gourmet

Recent development of key growth drivers


Emerging Markets Outsourcing & Strategic partnerships

� Additional volume from current

partnerships agreements

� New outsourcing deal with a Global

Food Manufacturer in an emerging

market

� Ramp-up outsourcing volumes from

Arcor, Morinaga, Bimbo


HY 2014/15

Gourmet & Specialties- Key achievements in first 6 months HY 14/15Gourmet & Specialties- Key achievements in first 6 months HY 14/15

LEA

D &

EX

PA

ND

ED

UC

AT

EIN

SP

IRE

� Gourmet volumes accelerating in Q2, outperforming the

foodservice market through education and inspiration

� Leading the way through successful innovations with Cacao

Barry Purity from Nature and Callebaut Hot Chocolate

� Emerging markets keep steady double- digit-growth, fueled

by Global brands

� Developed markets Western Europe and North America back

to volume growth

� Distribution points increasing vs. prior year in both local and

global brands

INN

OV

AT

E

Highlights HY 2014/15


Expansion of Brazilian

Chocolate factory

Oct 2014

Expansion of Chocolate plant

in Lodz Poland

Nov 2014

Inaguration of the first

chocolate factory in Chile

Dec 2014

Signing of outsourcing

agreement with WFC (USA)

Feb 2015

Inaguration new CHOCOLATE

ACADEMY TM in Cologne

Feb 2015

Optimized cocoa Fermentation

process, improved superior

tasting chocolate

March 2015

Start-up of operations in our

first Chocolate factory in India

Jan 2015


ACADEMY TM in Dubai

Jan 2015


ACADEMY TM in Moscow

March 2015




� Q&A

Agenda


Accelerating volume growth, strong profitability

HY 2014/15

Group performance HY 2014/15

(in CHF mio.)

% vs prior year

(in CHF)

% vs prior year

(in local

currencies)

Sales Volume (in tonnes) 893,437 2.0%

Sales Revenue 3,244.2 11.6% 14.5%

Gross Profit 446.2 5.8% 9.5%

EBIT EBIT per tonne

219.2

245.3

8.7%

6.6%

13.0%

10.8%

Net profit for the period 132.4 10.7% 16.3%


Volume

growth

Strong top and bottom-line performance of main Regions Europe and

Americas


HY 2014/15

+2.1% +1.9% +5.8% +1.2%

EBIT

growth in

CHF

EBIT

growth in

local currencies

25%

4%

28%

Europe Americas Asia Pacific Global Cocoa

+15.8% +12.4% +4.0% -39.6%

+21.9% +9.5% +7.1% -36.4%

43%

25%

4%

28%

Challenging cocoa market environment, negative impact from the cocoa

combined ratio

Cocoa processing profitability

European combined ratio- 6 months forward ratio

For cocoa processors, profitability depends on the ratio between input costs (price of cocoa beans) and output prices (price of cocoa butter and powder).

Combined ratio

2.75

Butter ratio

Powder ratio

Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14

0.00

1.00

2.00

3.00

4.00


Gross Profit HY 2014/15


in mCHF

+12.1%

* Without Cocoa

Processing impact

-15.5

Gross Profit

H1 2014/15

before FX

461.7

+5.8%

Gross Profit

H1 2014/15

446.2

FX impact

-10.0

Volume

effects

+53.6

421.6+9.0

Gross Profit

H1 2013/14

Product Mix

-12.5

+9.5%

Cocoa

Processing

Add.

Operational

costs due

to growth

and others

Gross profit up +9.5% maily due to better product & customer mix and

focus on margins

EBIT HY 2014/15

Significant improvement at Operating Profit level, through higher focus on

margins, better product mix and tigher cost control


in mCHF

-8.7

EBIT

H1 2014/15

before FX

FX impact

219.2

EBIT

H1 2014/15

+8.7%

227.9

Add. Costs, other

scope and non-

recurring items

-5.4

Additional SG&A

from business

growth

-8.5

Additional

Gross Profit

+40.1

EBIT

H1 2013/14

201.7

+13.0%

FX translation impact for FY, at current

rates estimated up to -30 mio CHF

6-year EBIT per tonne development

Improvement of the EBIT per tonne comtinues. On track to achieve our

mid-term guidance

285274

251

290

312

282

245

242

223

256

286282

1’269

2009/10

1’536

2011/12

1’378

2010/11

1’717

2012/13

+9.1%

2013/14 2014/15

(HY)

8931’210

EBIT per tonne in CHF

(as reported)

EBIT per tonne in CHF

(at constant currencies)

Volume in kMT


0%

50%

100%

150%

200%

250%

300%

Sep.2007 Sep.2008 Sep.2009 Sep.2010 Sep.2011 Sep.2012 Sep.2013 Sep.2014

Cocoa bean price still at relatively high levels, other raw materials below

prior year

Raw materials evolution

Cocoa beans

+12%

Milk powder

-40%

Sugar EU

-23%

Sugar world

-2%

HY 14/15 HY vs. prior

year

Half-year Results - Analysts ConferenceApril 1, 2015

Receivables Stocks Payables

Net Working Capital

Good working capital management with negative impact only from higher

cocoa bean prices

Others and

FX impacts

Net

Working

Capital

Feb 15

+4.3%

1’567

-113

+41

1’501

Growth

impact

+202

Price impactNet

Working

Capital

Feb 14

-17

Growth

impact

Price impact

and

operational

improvements

+15

Growth

impact

+28

-91

Operational

improvements

offset by price

impact

in CHF mio.


High cocoa bean price levels still weighing on our Balance Sheet and key

ratios

Balance Sheet & key ratios

Feb 15 Aug 14 Feb 14

Total Assets [CHF m] 5,433.4 5,167.5 5,106.9

Net Working Capital [CHF m] 1,566.6 1,674.6 1,501.4

Non-Current Assets [CHF m] 2,139.5 2,175.6 2,068.6

Net Debt [CHF m] 1,790.6 1,803.5 1,698.2

Shareholders' Equity [CHF m] 1,654.4 1,790.7 1,658.9

Debt/Equity ratio 108.2% 100.7% 102.4%

Solvency ratio 30.4% 34.7% 32.5%

Net debt / EBITDA 3.2x 3.4x 3.6x

Interest cover ratio 4.6x 4.5x 4.9x

ROIC 10.9% 10.5% 11.1%

ROE 16.2% 14.7% 15.6%


Available Financing

Enough headroom for further growth and raw material price fluctuations

EUR 250 mio.

5.375% Senior Notes

USD 400 mio.

5. 5% Senior Notes

EUR 600 mio

Syndicated Bank Loan

(11 banks)

Related party loan CHF 150 mio

EUR 175 mio. Term Loan (8 banks)Various bilateral LT loans

EUR 600 mio.

Domestic Commercial

Paper Programme

CHF 791 mio.Various

uncommitted facilities

ABS

Maturity 2017

44.9%

Maturity 2021

EUR 350 mio.

6% Senior Notes

Outstanding amounts

Long-term

Short-term

ABS

Available Funding Sources

Maturity 2023

Maturity 2019

Maturity 2017

Maturity 2016

3-5 years

Short term

CHF 3,830 mio

CHF 2,111 mio

As of 28 Feb 2015

Committed

lines





� Q&A

Agenda


The Barry Callebaut Group’s growth strategy

Our proven four-pillar strategy is the basis for our long-term business

success

Vision

4 strategic

pillars

Sustainable,

profitable

growth

Expansion

Innovation

Cost Leadership

Sustainable Cocoa

“Heart and engine of the

chocolate and cocoa industry”


Significant further opportunities with three key growth drivers

� BC with 25% market share

� Acquisitions pipeline

� Adjacent products

� Increase distribution points

� Long-term faster volume growth

than developed markets

� Enormous growth opportunities,

with current low consumption per

capita

� Potential volume of 3 mio tonnes

� 80% in emerging markets is captive

market

Global market

(2% volume growth

long-term)

Emerging

markets

Gourmet

Outsourcing &

Strategic

partnerships

Expansion


Strong, structured innovation funnel to support additional volume growth

Innovation

Sweet

I

D

E

A

G

A

T

E

C

O

N

T

R

A

C

T

G

A

T

E

L

A

U

N

C

H

Project B

Project D

Project H

Project E

Pure

Project G

Project I

Project J

Project K

Project C

Project L

Project A

Project M

Controlled Fermentation: Special yeast to optimize

cocoa fermentation and intensify the taste of chocolate

Hot: Chocolate recipes with higher thermo tolerance.

Melting point up to 4°Celsius higher than normal.


Strengthening efficiency, optimizing and enabling for future growth

Cost Leadership

Intention to create a Shared Service Center (SSC) for Europe in Poland

� Benefits:

� Increase operational efficiency and create economies of scale and

skills

� Local functions can focus more on non-standardized activities

� Scope: Transactional activities performed in Europe

� Timeline: 24 months

� Financials:

� Investments of a double-digit CHF million, payback of 3-5 years

� Initial annual savings of 2.5m EUR

� Expand up to 200 FTE’s with ~ double-digit mio EUR savings

Łódź

Łódź is the third largest city of

Poland after Warsaw and

Krakow.

The city is working hard to be

attractive for foreign companies

and local workforce:

infrastructure, shopping centers,

cultural activities, many real

estate development projects

going on, presence of

universities, …



Sustainable Cocoa

Sustainable cocoa – Leading the industry through innovation,

implementation and impact

Customers initiatives

targetting to switch to sustainably

sourced cocoa by 2020

«Cocoa Life»

«Vision for Change»

«Cocoa Plan»

Other customer

plans

«Learn to grow»

• Partnering with key customers, aligning and accelerating own programs

• Expanding our Biolands /Direct Sourcing model in Ghana and other key

origin countries

• Step up of our «QPP» to a fully verified program (digital farm and farmer

data, traceability and transparency) in Ghana, Brazil and Indonesia

CocoaAction

(Industry Collaboration)

BC strategic actions:

Market/ Industry Outlook

� Long-term growth in chocolate and cocoa products

markets remains intact

� Significant opportunities along the key growth drivers

Mid-term Guidance*

� On average 6-8% volume growth per year, and

� EBIT per tonne to reach CHF 256 by 2015/16

Outlook


* Barring any unforseable events ; EBIT per tonne subject to currency translation impacts




� Q&A

Agenda


� Accelerating volume growth, in particular in Western Europe

and Americas

� Volume growth well supported by key growth drivers:

Outsourcing and Gourmet

� Significant profit improvement, due to good product mix and

focus on margins and despite negative combined cocoa ratio

and negative FX translation impact

� Well on track to achieve our mid-term guidance

HY 2014/15

Summary


April 1, 2015

Appendix

Cash Flow

Cash flow

from financing

activities

Net decrease

in cash and

cash

equivalents

+1.9%

CF from other

activities

18+131

-31

Interest paid

and income

taxes

-42

Capital

Expenditures

-128

Investment

in Working

Capital

-211

Operating

Cash Flow

H1 2014/15

263

Operating

Cash Flow

H1 2013/14

258

* Before Working Capital changes

in CHF mio.

Cash flow above prior year, mainly impacted from high cocoa bean prices


half-year results 2014/15 1, 2015 half-year results 2014/15 analysts conference certain statements...

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